FY2005: Staggering increase of Comarch revenues

Comarch's annual financial results for 2005, particularly for the fourth quarter, were outstanding. Sales revenue in the fourth quarter of 2005 amounted to 195 million Polish zloty - a staggering 89% increase from the fourth quarter of 2004. The total amount of sales revenue in 2005 was 444 million zloty - an equally impressive 35% increase from the previous year.

- We are pleased with the 2005 financial results for Comarch. The current level of the Group’s 2006 order portfolio provides a positive outlook for continued dynamic growth in the future. As in the past, growth of profitability will continue to remain now and in the future, one of the most important priorities for the Company’s Board. Our goal is to achieve this growth by investing in the constant organic development of Comarch at home and in international markets. Therefore, we will continue to intensively invest in new technologies and human resources. I’m very proud that we have managed to accomplish this ambitious agenda of development to strengthen Comarch’s status as one of the best and most innovative IT companies in Central Europe. – said Professor Janusz Filipiak, Comarch CEO.

Comarch achieved significant growth in its operational profit margins of 26.7 million zloty in 2005 up from 16.1 million zloty in 2004. The company also recorded a significant improvement in EBIT Margin from 4.9% to 6% over the same 12 month period.

One of the company's priorities in 2005 was to improve EBIT Margin and this objective was met despite a dynamic growth and significant increase in employment. In 2005 Comarch hired an additional 300 employees to augment their workforce to 1836 staff members. Comarch's Board of Management is gratified the strategy has paid such handsome dividends.

Comarch Group's net profit reached a record level of 27.3 million zloty in 2005 - an extraordinary 140% increase on its 2004 figures. It should also be noted that the Group attained more than 17% return on capital, a twofold increase from 8.6% in 2004.

The level of the Group's order portfolio for the current year has reached 210 mln zl which is 36% more than during the same time in the preceding year of 2005. This fact confirms that the Group's prospects for the following years will remain promising and productive. Furthermore, the Company also emphasizes that improvement of ROI will remain a top priority to the Group in 2006 and beyond.

Detailed revenue structures show that the Comarch Group's sales are very well diversified and that the Group is not over dependent on any one sector or customer. This type of revenue structure significantly reduces the inherent risk involved in operating within multiple sectors which exhibit different paces of development. Throughout the past several years, the individual sectors' shares in overall sales have remained relatively stable. The value of export sales, measured in foreign currency, has risen about 15% (due to the strength of the Polish currency in 2005, this figure measured in PLN is similar to the level in 2004).

After public announcements of the 2005 financial results, Comarch stock has soared 12%. Since the beginning of the year, the price of Comarch shares have increased by over 40%.